Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
The AI Mega-trend Stocks Investing - When to Sell? - 28th May 20
Trump vs. Biden: What’s at Stake for Precious Metals Investors? - 28th May 20
Stocks: What to Make of the Day-Trading Frenzy - 28th May 20
Why You’ll Never Get Another Stimulus Check - 28th May 20
Implications for Gold – 2007-9 Great Recession vs. 2020 Coronavirus Crisis - 28th May 20
Ray Dalio Suggests USA Is Entering A Period Of Economic Decline And New World Order - 28th May 20
Europe’s Coronavirus Pandemic Dilemma - 28th May 20
I Can't Pay My Payday Loans What Will Happen - 28th May 20
Predictive Modeling Suggests US Stock Markets 12% Over Valued - 27th May 20
Why Stocks Bear Market Rallies Are So Tricky - 27th May 20
Precious Metals Hit Resistance - 27th May 20
Crude Oil Cuts Get Another Saudi Boost as Oil Demand Begins to Show Signs of Life - 27th May 20
Where the Markets are heading after COVID-19? - 27th May 20
Silver Springboards Higher – What’s Next? - 26th May 20
Stock Market Key Resistance Breakout Is Where the Rubber Meets the Road - 26th May 20
5 Ways To Amp Up Your CFD Trading Today - 26th May 20
The Anatomy of a Gold Stock Bull Market - 26th May 20
Stock Market Critical Price Level Could Soon Prompt A Big Move - 25th May 20
Will Powell Decouple Gold from the Stock Market? - 25th May 20
How Muslims Celebrated EID in Lockdown Britain 2020 - UK - 25th May 20
Stock Market Topping Behavior - 24th May 20
Fed Action Accelerates Boom-Bust Cycle; Not A Virus Crisis - 23rd May 20
Gold Silver Miners and Stocks (after a quick drop) Ready to Explode - 23rd May 20
3 Ways to Prepare Financially for Retirement - 23rd May 20
4 Essential Car Trade-In Tips To Get The Best Value - 23rd May 20
Budgie Heaven at Bird Land - 23rd May 20
China’s ‘Two Sessions’ herald Rebound of Economy - 22nd May 20
Signs Of Long Term Devaluation US Real Estate - 22nd May 20
Reading the Tea Leaves of Gold’s Upcoming Move - 22nd May 20
Gold, Silver, Mining Stocks Teeter On The Brink Of A Breakout - 21st May 20
Another Bank Bailout Under Cover of a Virus - 21st May 20
Do No Credit Check Loans Online Instant Approval Options Actually Exist? - 21st May 20
An Eye-Opening Perspective: Emerging Markets and Epidemics - 21st May 20
US Housing Market Covid-19 Crisis - 21st May 20
The Coronavirus Just Hit the “Fast-Forward” Button on These Three Industries - 21st May 20
AMD Zen 3 Ryzen 9 4950x Intel Destroying 24 core 48 thread Processor? - 21st May 20
Dow Stock Market Trend Analysis and Forecast - 20th May 20
The Credit Markets Gave Their Nod to the S&P 500 Upswing - 20th May 20
Where to get proper HGH treatment in USA - 20th May 20
Silver Is Ensured A Prosperous 2020 Thanks To The Fed - 20th May 20
It’s Not Only Palladium That You Better Listen To - 20th May 20
DJIA Stock Market Technical Trend Analysis - 19th May 20
US Real Estate Showing Signs Of Covid19 Collateral Damage - 19th May 20
Gold Stocks Fundamental Indicators - 19th May 20
Why This Wave is Usually a Market Downturn's Most Wicked - 19th May 20
Gold Mining Stocks Flip from Losses to 5x Leveraged Gains! - 19th May 20
Silver Price Begins To Accelerate Higher Faster Than Gold - 19th May 20
Gold Will Soar Soon; World Now Faces 'Monetary Armageddon' - 19th May 20

Market Oracle FREE Newsletter

Coronavirus-stocks-bear-market-2020-analysis

Stock Markets Drift Lower In A Quiet Market

Stock-Markets / Financial Markets Dec 18, 2008 - 12:00 PM GMT

By: PaddyPowerTrader

Stock-Markets Best Financial Markets Analysis ArticleIt's gone all eerily quiet in a fatigued and illiquid market as we approach end year. The Dow Jones fell 1.12% last night in another low volume day . Stocks continue to fret in the wake of the Madoff debacle. Morgan Stanley missed their earnings expectations badly yesterday and GE has even given up giving earnings guidance.


Today's Market Moving Stories

  • Incoming US President Obama said he will nominate Daniel Tarullo to an open seat on the Federal Reserve Board.
  • The UK Deputy Governor of the Bank of England said they may take rates all the way to zilch. He also mentions the new buzzword “quantitative easing” but says that this of course would have to be approved by the Treasury.
  • The UK Chancellor is set to announce another multi-billion pound package next month, aimed at getting the banks to restart lending to businesses of all sizes. Past loan schemes along these lines have covered up to 80% of the risk on each loan. But this generates further risks to the taxpayer in the event that a worsening economic outlook leads to an increase in default rates and crystallises some of the Government's contingent liabilities.
  • ECB arch hawk Axel Weber said that rates may be allowed dip below 2% (the historic post 9/11 low) as their forecasts for economic growth may be trimmed further. Their staff forecasts, though only three weeks old, look like fantasy island stuff.
  • There is some talk that the ECB may announce a cut in the rate on interest that they pay banks who lodge monies with them. They want to encourage banks to lend and get that pesky V in the old MV = nominal GDP going again. So far everything else they've tried has merely resulted in more hoarding.
  • Chrysler has announced that it is to shut all 30 of its plants from tomorrow for one month. The two desperados, GM and Chrysler, have restarted merger talks. One is reminded of the old adage that two wrongs don't make a right. In related news President Bush (yes that cretin is sadly still in office) said that he'll decide on emergency loans to automakers “relatively soon”! There's no urgency or course.
  • One can only surmise that the game is up for the majority of hedge funds and they will be faced with massive redemption calls at any given month end until they are more or less extinct in the form we knew them. This will lead to more seemingly illogical short selling.
  • Its refreshing to see that falling demand of oil still trumps the OPEC cry babies. Despite cutting production by 2.2m barrels per day, US Crude fell by 8%! Yes despite the merchants of doom predicting that we were on they way back to a three figure handle per barrel, the price actually is hovering around $40 barrel. Dire news for Putin and those simply insufferable Iranians but some Xmas cheer at the pumps for consumers and another disinflationary input.
  • Ireland is back in focus due to the weakness of sterling which is putting huge stress on already hard pressed retailers as Xmas shoppers flock across the border.

Dollar Freefall
EURUSD's uninterrupted climb back to 1.45 in jig time is just one example of the general inertia prevailing. The potential for a bit of a run on the US Dollar is beginning to worry investors, particularly those overseas. A twin deficit of 10-12% of GDP historically has spelt curtains for any currency. That said the reserve status of the Dollar has been called into question before, only for it to rebound sharply.

There isn't much “easy money to be made”. As correlations break down, sure bets like a “weak Dollar = higher commodity prices” that had worked a treat thus far this year are now losers.

Data Today
The main focus of the European morning will be the key German IFO business survey sentiment at 09.00. This is closely watched by even the ivory tower dwellers of the ECB and is on a 6 month losing streak. A further fall in the index to 84 is expected by the markets. A super weak number may put a January rate cut back on the table.

UK-wise, we have the random walk that is the retail sales number (i.e. it is very difficult to predict) at 09.30 with the street looking for a –0.6% read.

Stateside we have the weekly jobless claims (-558k expected) at 13.30; leading indicators (-0.4%) at 15.00; Philly Fed (-40.5) at 15.00 and the weekly natural gas inventories. The Fed's Fisher will also give a speech.

Equities and Earnings

  • Today sees earnings from FedEx, Pier 1, Rite Aid, Oracle, Palm and Research In Motion. For a daily list, check out the new Trader Report .
  • Nike beats expectations last night after the bell on strong overseas sales.
  • Apple's share price is under the kosh on renewed concerns about Steve Jobs health.
  • French supermarket giant Carrefour has put out a profit warning.
  • Mining giant Rio Tinto have had their credit rating cut by Moody's due to the debt burden from their Alcan acquisition.
  • Merger talks between BA and Aussie airline Quantas have been called off.

And Finally… Fred Thompson On The Bailouts
Remember irony is not something your mother used to do for you.

Disclosures = None

By The Mole
PaddyPowerTrader.com

The Mole is a man in the know. I don’t trade for a living, but instead work for a well-known Irish institution, heading a desk that regularly trades over €100 million a day. I aim to provide top quality, up-to-date and relevant market news and data, so that traders can make more informed decisions”.

© 2008 Copyright PaddyPowerTrader - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

PaddyPowerTrader Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules